Filed 7/14/20 Nationwide Biweekly Admin. v. Superior Court CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

NATIONWIDE BIWEEKLY ADMINISTRATION, INC. et al.,

Petitioners,

v.

SUPERIOR COURT OF ALAMEDA,

Respondent;

THE PEOPLE,

Real Party in Interest.

A150264

(Alameda County

Super. Ct. No. RG15770490)

Nationwide Biweekly Administration, Inc., Loan Payment Administration, LLC, and Daniel S. Lipsky (the alleged alter ego, principal and sole shareholder of Nationwide and Loan Payment) (collectively petitioners), operate a debt payment service that claims to reduce the amount of interest owed by accelerating debt repayment via an extra annual payment. The California Department of Business Oversight and the district attorneys of four counties (collectively the People) challenged a number of petitioners’ business practices and in the underlying action sought civil penalties under Business and Professions Code sections 17200 and 17500, and Financial Code section 12105, subdivision (d), as well as injunctive relief, restitution, disgorgement, the voiding of petitioners’ allegedly unlawful contracts, costs and attorney fees. In conjunction with their answer, petitioners demanded a jury trial, which the People successfully moved to strike.

Petitioners sought writ relief, which we initially denied. On review, the California Supreme Court transferred the matter back to this court, with directions to issue an order to show cause why petitioners do not have a right to a jury trial “where the government seeks to enforce the civil penalties authorized under Business and Professions Code sections 17206 and 17536 and Financial Code section 12105, subdivision (d).” We granted petitioners’ request for extraordinary relief, in part, concluding the “gist” of the statutory causes of action asserted against them were legal, thereby giving rise to a right to jury trial under the California Constitution.

The Supreme Court granted review and reversed, concluding “there is no right to a jury trial under the California Constitution in a cause of action under the UCL or the FAL, including an action in which civil penalties as well as an injunction or other equitable relief are sought.” (Nationwide, supra, 9 Cal.5th at p. 327.) The Court remanded the matter “for further proceedings consistent with this opinion.” (Id. at p. 332.)

DISCUSSION

The Supreme Court declined to consider whether Nationwide has a right to jury trial under the federal constitution. It stated: “In its answer brief filed in this court, Nationwide maintains that if this court rejects its state constitutional claim, we should address the question whether it has a right to a jury trial under the Sixth or Seventh Amendment to the United States Constitution and should hold, notwithstanding the absence of federal decisional support, that it has a right to jury trial in a state court action under those federal provisions. The Court of Appeal did not address these issues, neither the petition for review nor any answer to the petition raised these issues, and thus we decline to address those issues.” (Nationwide, supra, 9 Cal.5th at p. 334, fn. 25.) Accordingly, on remand we address Nationwide’s claim it has a federal constitutional right to jury trial.

Federal Constitutional Right to Jury Trial

In its writ petition, Nationwide maintained it has a right to jury trial under the Seventh Amendment of the United States Constitution, which it claims applies to the states through the Fourteenth Amendment.

There is an unbroken line of cases holding the Seventh Amendment does not apply to state court proceedings. “[T]he Seventh Amendment applies only to proceedings in courts of the United States and does not in any manner whatever govern or regulate trials by jury in state courts or the standards which must be applied concerning the same. [Citations.] So completely and conclusively have both of these principles been settled, so expressly have they been recognized without dissent or question almost from the beginning in the accepted interpretation of the Constitution, in the enactment of laws by Congress and proceedings in the Federal courts, and by state constitutions and state enactments and proceedings in the state courts, that it is true to say that to conceded that they are open to contention would be to grant that nothing whatever had been settled as to the power of state and Federal governments or the authority of state and Federal courts and their mode of procedure from the beginning.” (Minneapolis & St. L. R. Co. v. Bombolis (1916) 241 U.S. 211, 217.) “The Court has not held that the right to jury trial in civil cases is an element of due process applicable to state courts through the Fourteenth Amendment.” (Curtis v. Loether (1974) 415 U.S. 189, 192, fn. 6.) “If the case was brought in a state court and the Attorney General declines to remove, the Seventh Amendment would not figure in the case, for it is inapplicable to proceedings in state court.” (Osborn v. Haley (2007) 549 U.S. 225, 252, fn. 17.)

Nationwide claims, however, that in McDonald v. City of Chicago (2010) 561 U.S. 742, a case involving the application of the Second Amendment to the states, the court adopted a more expansive view of incorporation of the Bill of Rights which he urges this court to apply to the Seventh Amendment. Nationwide fails to note, however, the McDonald court rejected the notion that the Seventh Amendment applies to the states, stating: “the only rights not fully incorporated are (1) the Third Amendment’s protection against quartering of soldiers; (2) the Fifth Amendment’s grand jury indictment requirement; (3) the Seventh Amendment right to a jury trial in civil cases; and (4) the Eighth Amendment’s prohibition on excessive fines.” (Id. at 765, fn. 13.)

The United States Supreme Court’s pronouncements on the issue are dispositive. We note, however, that our Supreme Court said the same thing in a case decided seven years after McDonald: “To date, the United States Supreme Court has not held that the federal constitutional right to a jury trial ‘[i]n suits at common law, where the value in controversy shall exceed twenty dollars,’ embodied in the Seventh Amendment of the United States Constitution, is an element of due process applicable, through the Fourteenth Amendment, in civil actions in state court. [Citations.] The civil jury trial provision of the Seventh Amendment has been applied only in federal judicial proceedings.” (Shaw v. Superior Court (2017) 2 Cal.5th 983, 993, fn. 8.)

“Under the doctrine of stare decisis, all tribunals exercising inferior jurisdiction are required to follow decisions of courts exercising superior jurisdiction.” (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, italics omitted.) Contrary to Nationwide’s suggestion, we are bound by the decisions of the United States Supreme Court and California Supreme Court in this regard.

DISPOSITION

The petition for writ of mandate is denied. Costs on appeal are awarded to real party in interest. (Cal. Rules of Court, rule 8.493.) The matter is remanded to the superior court for further proceedings consistent with this opinion.

 

_________________________

Banke, J.

We concur:

_________________________

Margulies, Acting P.J.

_________________________

Sanchez, J.

A150264, Nationwide v. Superior Court